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Bangladesh’s Trade Partners and the J-Curve: An Asymmetry Analysis

Listed author(s):
  • BAHMANI-OSKOOEE, Mohsen
  • Rahman, Mir Obaidur
  • Kashem, Muhammad

Separating currency appreciations from depreciations and using nonlinear models in recent literature have improved discovering significant link between the trade balance and the exchange rate. We add to this growing literature by considering the experience of Bangladesh with 11 trading partners. When a linear model was used, support for the J-curve effect was present only with one small partner. However, when a nonlinear model was used, support increased to three countries including the largest partner, the U.S. which accounts for more than 12% of Bangladesh’s trade. Furthermore, the nonlinear models supported short-run asymmetry adjustment as well as short-run asymmetry effects of exchange rate changes in most cases. However, long-run asymmetric effects were limited to a few.

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File URL: https://mpra.ub.uni-muenchen.de/81208/1/MPRA_paper_81208.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 81208.

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Date of creation: 06 Aug 2017
Date of revision: 07 Sep 2017
Handle: RePEc:pra:mprapa:81208
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  1. Rose, Andrew K. & Yellen, Janet L., 1989. "Is there a J-curve?," Journal of Monetary Economics, Elsevier, vol. 24(1), pages 53-68, July.
  2. Helen B. Junz & Rudolf R. Rhomberg, 1973. "Price competitiveness in export trade among industrial countries," International Finance Discussion Papers 22, Board of Governors of the Federal Reserve System (U.S.).
  3. repec:eme:jespps:jes-05-2015-0091 is not listed on IDEAS
  4. Junz, Helen B & Rhomberg, Rudolf R, 1973. "Price Competitiveness in Export Trade Among Industrial Countries," American Economic Review, American Economic Association, vol. 63(2), pages 412-418, May.
  5. repec:eme:jespps:jes-05-2015-0081 is not listed on IDEAS
  6. Nazif Durmaz, 2015. "Industry levelJ -curve in Turkey," Journal of Economic Studies, Emerald Group Publishing, vol. 42(4), pages 689-706, September.
  7. Mohsen Bahmani-Oskooee & Artatrana Ratha, 2004. "The J-Curve: a literature review," Applied Economics, Taylor & Francis Journals, vol. 36(13), pages 1377-1398.
  8. repec:eme:jespps:jes-03-2016-0050 is not listed on IDEAS
  9. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
  10. Bahmani-Oskooee, Mohsen, 1985. "Devaluation and the J-Curve: Some Evidence from LDCs," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 500-504, August.
  11. Stephen P. Magee, 1973. "Currency Contracts, Pass-Through, and Devaluation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(1), pages 303-325.
  12. Hamid Baghestani & Samer Kherfi, 2015. "An error-correction modeling of US consumer spending: are there asymmetries?," Journal of Economic Studies, Emerald Group Publishing, vol. 42(6), pages 1078-1094, November.
  13. Mohsen Bahmani-Oskooee, 2010. "The J- and S-curves: a survey of the recent literature," Journal of Economic Studies, Emerald Group Publishing, vol. 37(6), pages 580-596, November.
  14. repec:eme:jespps:v:43:y:2016:i:4:p:587-597 is not listed on IDEAS
  15. Bahmani-Oskooee, Mohsen, 1986. "Determinants of international trade flows : The Case of Developing Countries," Journal of Development Economics, Elsevier, vol. 20(1), pages 107-123.
  16. repec:eee:reveco:v:49:y:2017:i:c:p:313-326 is not listed on IDEAS
  17. Periklis Gogas & Ioannis Pragidis, 2015. "Are there asymmetries in fiscal policy shocks?," Journal of Economic Studies, Emerald Group Publishing, vol. 42(2), pages 303-321, May.
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